Measuring the Productivity of Software Development in a Globally Distributed Company

Alec Levenson

in International Differences in the Business Practices and Productivity of Firms

Published by University of Chicago Press

Published in print October 2009 | ISBN: 9780226261942
Published online February 2013 | e-ISBN: 9780226261959 | DOI:
Measuring the Productivity of Software Development in a Globally Distributed Company

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This chapter analyzes the experience of one company that has moved extensively to take advantage of lower labor costs for technical talent by spreading its software research and development (R&D) works worldwide. The research issues addressed are: whether there are differences in performance between the company's software development sites in the United States, Western Europe, and other countries; the factors leading to those differences; the company's rationale for locating software development work in those locations; and the future prospects for software development work at those locations. The chapter has found evidence in favor of several conclusions: International differences in productivity do not appear to be a big factor in explaining cross-sectional patterns of software development work Location, to the extent that geographic dispersion, matters, and spreading work out to the point where there is no overlap in the standard workday may put limits on the productivity of individual team members. However, the teams as a whole appear capable of dealing with such pressures without significantly impacting the teams' overall effectiveness, and even though the data did not reveal average productivity differences across sites, this says nothing about marginal productivity differences.

Keywords: productivity; software development; globally distributed companies; labor costs; technical talent

Chapter.  15304 words.  Illustrated.

Subjects: International Economics

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